Question

Question 6 4.5 pts Mason Company produces short videos used in self-help seminars. Mason Comp any charges $310 for each video it produces. The number of videos produced ove r the last six months along with the total costs of producing these videos i given below: Costs Incurred Videos Produced Month $18,380 June 70 July 17,230 61 August 14,100 45 September 16,120 55 15,000 October 18,900 75 November Mason Company expects to produce 64 videos during December. Using the high-low method, calculate Mason Company's total expected cost for December.

Answer 1

	Cost incurred	Videos produced
High level of activity ( November )	18900	75
(-) Low level of activity ( August )	14100	45
Difference	4800	30

Variable cost per video produced = Difference in cost incurred / Difference in videos produced = 4800 / 30	160	per video produced
Now let us calculate the fixed cost using the data of high level of activity
Total cost incurred = ( Videos produced * Variable cost per video produced ) + Fixed cost
18900 = ( 75 * 160 ) + Fixed cost
18900 = 12000 + Fixed cost
Fixed cost = 18900 - 12000	6900

Total expected cost for December = ( Expected videos to be produced * Variable cost per video produced ) + Fixed cost = ( 64 * 160 ) + 6900

17140